Deputy PM Mikloš: "Society has matured and moved up"

KOŠICE - The decision of Deputy Prime Minister for Economy Ivan Mikloš to join the Slovak Democratic and Christian Union (SDKÚ) of PM Mikuláš Dzurinda a fortnight ago was given mixed reviews.
Political analysts said that Mikloš might help the flagging party in the polls, as well as give a more pro-reform thrust to its avowedly 'centre-right' politics. Economists, meanwhile, worried that Mikloš' re-entry into 'big politics' might spell the end of 'radical' economic reform in Slovakia as the Deputy PM would have to obey a political agenda not of his own drafting.
The man himself declares that reform will not suffer, and that much of the scepticism surrounding his motives and future is due to the naive expectations of a population which is deeply disappointed that reform has not been achieved overnight.

Ivan Mikloš (right) thinks that Prime Minister Dzurinda has done the best job possible of leading a disparate and often fractious cabinet.
photo: TASR

KOŠICE - The decision of Deputy Prime Minister for Economy Ivan Mikloš to join the Slovak Democratic and Christian Union (SDKÚ) of PM Mikuláš Dzurinda a fortnight ago was given mixed reviews.

Political analysts said that Mikloš might help the flagging party in the polls, as well as give a more pro-reform thrust to its avowedly 'centre-right' politics. Economists, meanwhile, worried that Mikloš' re-entry into 'big politics' might spell the end of 'radical' economic reform in Slovakia as the Deputy PM would have to obey a political agenda not of his own drafting.

The man himself declares that reform will not suffer, and that much of the scepticism surrounding his motives and future is due to the naive expectations of a population which is deeply disappointed that reform has not been achieved overnight.

Mikloš adds that his role, at 30 years of age, as advisor to Slovakia's Deputy Premier for Economy Jozef Kučerák, and at 31 as Minister of Privatisation from 1991 to 1992, convinced him that standard, one-size-fits-all solutions to the needs of transforming economies were not enough. More attention, he felt, should be paid to the need for functioning market and democratic institutions, for the impact of history on the country, and for the role played by the 'informal rules' governing people's behaviour.

It also made him question the wisdom of trying to reform the entire country in four years - if the price of such unpopular reforms was a trouncing at the polls and almost six years of political exile.

The Slovak Spectator caught up with him April 25 in Košice's bustling Hotel Slovan, whose packed cafés and multi-lingual business guests clearly illustrates that the east of the country is experiencing a modest economic revival in the wake of the investment of Pittsburgh steel maker U.S. Steel into Slovakia's VSŽ.

In deciding mid-April to join PM Dzurinda's SDKÚ, Mikloš may now have a firmer political base for reforms.
photo: TASR

"When people feel a drain on their wallets and find themselves in a worse situation, it's often difficult to give them a rational explanation that will satisfy them."

The Slovak Spectator (TSS): Having been born in Slovakia's 'far east' and attended high school in Vranov nad Topľou, how does it make you feel coming back here when the reforms which you have pushed through have made the east such a poor cousin of Bratislava?

Ivan Mikloš (IM): The differences between parts of the country are really growing, that's true. Bratislava's standard of living, as measured by gross domestic product [GDP] per capita is now just about at the European Union [EU] average, while the Slovak average is 49% of the EU, and the east somewhere around 35%. That's quite a difference.

People often have the feeling that if a top government representative comes from a certain part of the country, it should have a positive effect on that region. Today, almost all top state representatives are from the east - including the Prime Minister, the Speaker of Parliament, the President, even the Governor of the National Bank - but that obviously hasn't helped the east.

It doesn't make me happy, of course, and I can feel the expectation that because I am from the east it should have an effect. I try to explain to people this is a long-term process including reform of public administration.

TSS: Given the fact that 'reform' has already occupied 10 years of people's lives without bringing the effects they expected, how do they react when you tell them to be patient a bit longer?

IM: That's another tough question. Ordinary people, and a lot of journalists too, often ask 'how much longer are we expected to wait?' The main problem is that reforms were begun from 1990 to 1992 and then stopped. After four decades of Communism, in which the state lived off the assets the country had accumulated at the expense of our common future, we went through another four years in the 1990s when the [1994 to 1998 Vladimír Mečiar] government deeply indebted the country and left the cupboard bare, so to speak. All this is very difficult to explain to people's satisfaction, which is another cause behind voter disappointment, behind the government's unpopularity.

It also evokes great skepticism, after 10 years and no improvement, that another decade will bring real change. It's a shame, because I believe that had we done the job properly in the early 1990s, we would be seeing the real fruits of it around now. We just have to hold on.

"Sometimes I feel that there is a sport among people who influence public opinion, in which whoever kicks the government the hardest is the biggest hero. [Although] I don't say the government from time to time doesn't deserve a good kick."

Mikloš from 1991 to 1992 served as Privatisation Minister at 31 years of age. The post is now held by Mária Machová (left).
photo: TASR

TSS: Your government attracted many young voters in 1998, and then lost some of them to new populist parties. Has part of the problem been that the reforms you promote make it even more difficult for young people - your voters - to start lives, buy houses, cars - in a word, to go from being asset-poor to being asset-rich?

IM: It's a bit more complicated than that. Today's government parties have widely varying levels of voter stability. Those people and parties which have been saying the same thing for a long time and following the same policies have lost less support in the last three years than parties which have based themselves on voter dissatisfaction or on some chimeric vision of the future without an ideological or value base - just look at the Party for Civic Understanding [SOP]. I think this will continue to be the case in the future - parties like Smer [a left-wing non-parliamentary party led by MP Robert Fico which is second place in the polls behind Mečiar's opposition Movement for a Democratic Slovakia (HZDS) - ed. note], if they are ever forced to take responsibility for running the country, will find it far more difficult to retain their voter support.

At the same time, it could be linked to what you said - that the government hasn't assured that its own voters have been able to gain economically.

TSS: You always said you were more of an economist than a politician. Will that change now that you have decided to join Prime Minister Dzurinda's SDKÚ party?

IM: Yes and no. Yes, the political aspect will have to be stepped up, but to a far lesser extent than if I had become a chairman of a party. The chairman of a party has to take care of its entire political agenda, while the vice-chair for economy, say, can afford to pay much more attention to economic matters.

TSS: You don't yet have a formal function within the party, although Dzurinda has mentioned you might be the head of its conservative platform. What will your job be? And why is the party talking about opening platforms when the whole point of the SDKÚ was to leave behind the squabbling between the five platforms with the SDK [the party at whose head Dzurinda won 1998 elections, and which preceded the SDKÚ - ed. note]?

IM: I don't see any problem in the existence of a platform. Every large party has to begin by declaring itself 'centre-right', or whatever, and then open platforms to accomodate the various broad political ideologies it represents.

Whatever my role turns out to be will be determined by the position and influence I command, both within the SDKÚ and with voters. It really doesn't matter whether or not I have a nominal function such as vice-chairman. The next scheduled SDKÚ Congress, where the chairman and vice-chairman are chosen, is set for after 2002 elections, so they would have to call an extraordinary congress to elect a new vice-chairman. Dzurinda has already told me this isn't out of the question. But it really doesn't matter to me.

TSS: You've said in the past the ideal combination is a charismatic politician and a serious economist whose ideas the former respects and champions. Will that be the case with the Dzurinda-Mikloš tandem?

IM: I think it could work out this way. But when I said that I had in mind more when I was an advisor to Jozef Kučerák, who held my current position from 1990 to 1991. When we saw how quickly Mečiar's influence increased, because of his charisma, we began to think what it would be like if that charisma could be applied to the task of pushing through quick and tough economic reforms. But in Mečiar's case it was an illusory hope, because he chose the easier path of demagoguery and populism.

TSS: The SDKÚ at one time last year had 16% voter support, but has recently fallen to just over 10%. What will happen within the party if its voter preferences continue to fall?

IM: For one thing, I think the flaws in polls of public opinion are well known, and while the most recent poll did indicate the lowest figure yet, I don't think it's an accurate reflection of reality. For another thing, I think that the economic effects of reforms could bring about an improvement, such as an increase in GDP growth, an increase in real wages, economic revival in general.

TSS: The government's political opponents tend to be populist parties, much as they were in 1992. How are you going to respond to the 'easy solutions' they will be offering voters, when the reforms you have given them over four years have been anything but easy?

IM: The situation is similar to that in 1992, but differs in some basic ways. All politicians and the majority of the population agree that Slovakia is tied to integration, and that dropping out of integration processes or delaying them could have fatal consequences, both for the country and the politicians that brought these things about.

Back then, this wasn't the case. Today Mečiar is seen very clearly as a threat by the West, while then he wasn't - both in 1992, and even as late as 1995, he was generally accepted.

Today the dissatisfaction is also more structured. In both the media and the wider public, we get criticism not just from people who don't want reforms, but also from people who don't think we're reforming fast enough. For this second group, there is not alternative to voting for us.

So the dissatisfaction is of a different order than before, as are the relationships between voters and parties. Back then, it was easy for politicians to profit from easy populism, they could promise that "when we get into power, we will solve everything" and people would believe them. Today few people put any stock in such social demagoguery, such sorcery, because they have learned their lessons since 1989. People's relationship to foreign investors has also changed - today no one rejects them.

There is a certain analogy now with the past, but society has matured and moved up a level.

TSS: You have said in the past that one of the lessons of the first reform period in Slovakia from 1990 to 1992 was that the leadership 'elite' had been "ahead" of the voters, that it had understood what reform involved and why it was needed, while these things remained a mystery to the average citizen. You also said that this gap could have been narrowed by better communication from the elite on the topic of reform. And yet, while we have had another reform period from 1998 to the present, the common folk seem no better informed as to the need for reform or what impact it will have on their lives. If you were smart enough to realise your mistakes from 1990 to 1992, why have you apparently repeated the same errors from 1998 to 2001?

IM: There's a difference, though, because now you have two main groups of critics. The first, you're right, may not understand the need for reform, and maybe we haven't explained things clearly enough to them. But when people feel a drain on their wallets and find themselves in a worse situation, it's often difficult to give them a rational explanation that will satisfy them. That's the same anywhere in the world.

And then there is that second group of critics, who hasn't misunderstood reform, but rather the opposite, understand them very well, and have simply not grasped that the process cannot be finished overnight, that true reform demands changes in the informal rules followed by society which often requires a change in generations.

This doesn't mean that we have explained everything perfectly. However I think the problem is not that we need more graphs and charts and rational arguments, but that we ourselves are not very trustworthy because the government is not united on the need for reform. When we have to do something unpopular and we have part of the ruling coalition telling the population it is needless, of course people are going to start to doubt what the rest of the coalition is saying about the inevitability of these steps. These tactics cause the most damage to the people who employ them - just look at the [Party of the Democratic Left] SDĽ, who use this tactic almost continually. Because voters naturally ask, "Well, if what the government is doing is so bad, why are you taking part in it?"

TSS: Still, some campaign on state media to get everyone onside might have been effective, say at the beginning of 1999. You've said that Winston Churchill is one of your icons from history - couldn't you or the prime minister have done a series of national radio addresses, like Churchill did in World War II?

IM: But we did [some kind of PR campaign]. My office prepared a 10-page booklet with arguments for reform in it, the simplest questions and answers - why is it needed, what will it mean, what are the alternatives. I distributed it to members of cabinet so they would know what arguments to use.

But at that time it wasn't such a problem. The media, both pro-reform media and journalists who see things and think in what I would call a more 'normal' way, were behind us. Now, many of these people think we could have been 10 times further ahead than we are, that there's no need to make compromises, and other such nonsense.

TSS: It's not just nonsense, surely? What of the gap that seems to be opening up between the government's foreign policy successes and its domestic record?

IM: This gap exists in how things are seen at home, where people look at the progress we have made with the OECD, NATO, attracting foreign policy and so on, but say that nothing has worked out on the domestic agenda. That's just not so. If we hadn't made progress at home by stabilising the economy and fixing the greatest deformations from the past, we wouldn't have been able to make the progress we have abroad.

It's another case of that "stupid mood" gripping Slovakia [a phrase first used by Czech President Václav Havel to describe the pessimistic mood that periodically gripped the Czech and Slovak Republics even though there appeared to be no objective basis for such pessimism - ed. note]. The majority of intellectuals and the media don't realise how complicated the process is, and had expectations that were too high, and thus criticise the situation and paint it as far blacker than it really is.

Sometimes I get the feeling that there is a sport among these people who have an influence on public opinion, in which whoever kicks the government the hardest is the biggest hero. I don't say the government from time to time doesn't deserve even a good kick, nor do I say that everything is just fine. Many things aren't going the way they should. But from the economic point of view, every indicator tells the same clear story. This is the way the West sees it, which is why we were accepted into the OECD. They evaluate us from a purely technical point of view, while people at home see us through the lens of their thinning pocketbooks. This is abused by the opposition, which is natural in politics, but it saddens me that the same feelings are often held by people who don't seem to realise that they are threatening the very thing they are after - progress on reforms and integration as soon as possible.

The basic problem is that some belief has arisen, particularly affecting me, that while I was at one time radical and ground-roots, now I am a compromiser and so on. I will quote my former colleague in the Democratic Party, chairman Ján Langoš, who told me "reforms aren't going quickly enough because you make too many compromises." This sentence epitomises the main misunderstanding of many intellectuals. Yes, I make compromises, but that's what politics is about, especially in a coalition as broad as the one we have in Slovakia. It's precisely because I make compromises that reform is going as quickly as it is. Without compromise, everything would be far slower. I know, because I started out with the kind of approach in which I said what I thought and stuck by it - and found that I couldn't put together any deals.

TSS: Analysts have said the political costs of launching the SDKÚ have so far outweighed the profits. The reason, they say, is because Slovakia's many small parties are a reflection of the country's social reality - a diverse electorate with many interests they want see represented. Are you guilty of doing in politics what you would never do in economics - dictating to the market, trying to give voters what serves you rather than what serves them?

IM: Whether the SDKÚ should have been formed or not is debatable. I used to be of the opinion, and still am, that if Mikuláš Dzurinda had run for the leadership of the Christian Democrat Party right after elections - and I think that at that time he could have won - that might have been a better solution, since he would have had political backing.

He didn't do it, and thus lost political backing as the head of the government. It was at the same time very difficult to agree on a common strategy between the five parties [of the SDK]. Today, if you want to lay blame, I think that all sides had their share in it, most of all the SDK itself, which was such a ragbag of parties - right, left, greens, what have you. Given the situation that arose, I think he [Dzurinda] had no choice but to do what he did.

Whether or not the SDKÚ helps to stabilise the political scene - I think it could help. Experience indicates that voters will more and more fear voting for small parties because they could waste their votes [if their party does not score the 5% minimum voter support needed to secure representation in parliament, in which case that party's votes are distributed between those parties which did secure seats - ed. note].

TSS: Slovak intellectuals and politicians from the early 1990s say Slovakia needs its small parties, and that Dzurinda has done great damage to the Slovak political scene by forming the SDKÚ. What are they referring to?

IM: Smaller parties can be ideologically more precise, and can promote particular ideas and principles in a more aggressive and clear way. The problem arises when, because of their lack of influence, they are unable to make an impact in political life. In that situation these parties are less parties than discussion clubs for the politicians involved.

Maybe it's natural - if a party wants to be politically influential, it can't afford to be ideologically so narrowly defined. Only a very small group of people have narrowly defined political ideals.

There have been surveys done by [political scientist] Vlado Krivý and others showing that the values promoted by the Democratic Party appeal to four to six percent of people. For 10 years I believed that the party's influence could be increased. I also believed it was to change the form of doing politics, and to make the 'package' we enclosed our policies in more attractive to voters. In the end, this was what caused my departure from the Democratic Party - I saw that most of the most influential people in the Democratic Party leadership were not prepared to change anything, not even in the packaging. They weren't even prepared to discuss it.

TSS: Sending to voters the message "we don't care whether you buy this or not"?

IM: Yes. Yes, yes.

TSS: So the SDKÚ was both an operational and existential necessity in Slovakia?

IM: When I speak of our party's programme I'm not talking about something written in some brochure that is covered in dust in some library, I'm talking about what is really being pushed through by the government. I sit in this government with ministers representing the SDKÚ, and with Prime Minister Dzurinda, and I really respect what he's doing and how he's doing it. Few people can imagine what a pain in the neck it is leading such a wide coalition government, finding consensus on questions that are sensitive and involve question of power - public administration reform, the Constitution... I can openly say that I am neither able nor willing to do his job. I think he does it as well as it can be done.

TSS: Why has the SDK's pre-election promise to put privatisers in jail proven so hard to keep?

IM: I too thought we would have more success in criminal prosecutions of those who did what they did. I'm disappointed with the way it has been carried out, and I don't think we did everything we could. I also think this is one of the most important reasons that voters are so dissatisfied.

TSS: Again, why hasn't it been done better? Some people have said it's because so much money is involved that justice has been perverted.

IM: There are both subjective and objective reasons. They [former privatisers] control huge sums of money, the cases are complicated, they have the best lawyers, economists and experts, while the civil service, prosecutors and the courts are much worse off in this respect. It also certainly has to do with corruption among the police, prosecutors and the courts. But still, I think these cases haven't been managed well, which is the subjective reason I was talking about.

TSS: Has your lack of a classical western education held you back at all in your career?

IM: In many ways it has been a disadvantage. The only possible benefits may have been that in relying on intuition to guide me I have sometimes appeared more convincing and natural.

TSS: How would you describe yourself?

IM: Sometimes I'm not thorough enough, I may bite off more than I can chew. I'm also a bit lazy, which is why I need to be under pressure. My biggest plus has been that so far I have succeeded in assembling around me a group of able people. But I've never been particularly ambitious, I've never wanted a particular position or to build some fantastic career... it's more or less been a case of doing what I believed in, whether or not I was successful, whether or not I was popular.

The remainder of this interview, covering globalisation, privatisation and issues of interest to investors, will be published in The Slovak Spectator's European Investor insert, on stands in late May.

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